Tuesday, 12 May 2015

Technology Sourcing & Market Reach is a Bottleneck

Vineet Wadhwa, CEO Logic Eastern tells Cable Quest about the state of Indigenous Manufacturing of Digital STBs and answers other questions on CAS, SMS & Billing Middleware.
CQ: What is the present state of STB manufacturing in the country? 
Vineet Wadhwa:I think the scenario is quite encouraging. Today we have over 10 manufacturers that we know of. Less than a year ago, there were only 3 to 4. More and more overseas manufacturers are sharing technology with Indian manufacturers and helping them to make STBs in India. This is a very fruitful training exercise for Indian manufacturers who will slowly begin to invest more and more in R&D to reduce their dependence on these overseas manufacturers. At the same time we are seeing more and more talent related to DVB skills appearing in the market. We are also seeing more and more component suppliers providing relevant services to make manufacturing easier. So I believe that step-by-step an ecosystem is being built which is bringing us closer to us becoming totally self reliant in this area.
CQ: What is the present capacity to manufacture STBs in the country?
Vineet Wadhwa: In my opinion, the capacity is not an issue at all. There are so many contract manufacturers with idle capacity and man power. Many of them have access to abundant working capital and component sourcing strength too. I think the bottleneck lies in the technology sourcing and market reach. The STB market is not an open market. It needs relationship building with Multi System Operator as well as the Conditional Access Software Vendor. Both of these are quite few in number and hence there is an intense competition. Many times, CAS vendors have their own preferred STB vendors so that makes things even more difficult.

CQ: What are the major hurdles in indigenous manufacturing and what incentives do the industry expects?
Vineet Wadhwa: I think the biggest hurdle is the VAT. Government has taken a big step that C-forms are now available for STBs. But still smaller MSOs find it difficult to provide C-Forms. In this case the manufacturer has to charge 12 to 14% VAT. This when compared to 4% of SAD puts the indigenous manufacturer at a disadvantage.
Secondly, the government should persuade the MSOs to procure the STBs from the local manufacturers. It could give them some incentives for that.
The advantages of sourcing from indigenous manufacturers are quite numerous. First of course is technical support. Manufacturers have an in depth knowledge of issues that can possibly arise in the STBs during their life time.
Then there are other advantages like shorter delivery time, local repair and maintenance, local components availability, local customization capability, easier financing schemes, better understanding of creditworthiness and business guarantees etc.
I think one of the major concerns of the MSO is the longevity of the manufacturer. If that is convincingly proven by the manufacturer and if all other parameters are same, the advantages of dealing with a local manufacturer would preponderate to such an extent that the decision will be a no-brainer.
As far as BIS certification is concerned we have not had any problem getting the IS certification. It took us around 2 months to get it but it was largely due to delays in getting the paperwork together. For most companies, second time has been much faster.
CQ: What about selecting a CAS for a digital cable system? Should it be a Card based or Cardless?
Vineet Wadhwa: Some of the Issues involved in selecting a CAS are:-
1.Support is the most important issue here. I know this point is perhaps obvious to the extent of having become a cliche, but getting stuck with a vendor who does not understand the unique support related issues that arise in India could lead to certain failure.
2.Ability to move quickly on incorporating new features. Most CAS vendors take a long time to approve new features through their security processes. This can give competing MSOs an advantage that could be easily avoided and that could prove to be very expensive brand wise.
3.Cost- Of course cost is very important. With the new technology developments, a good stable CAS software need not necessarily mean unaffordable.
Cardless CAS: Most new CAS systems are cardless. With more and more security features getting packed in the main IC itself and with the encryption algorithms becoming stronger and the CPUs on the main ICs becoming more and more powerful, the Smart card is being increasingly made redundant. Almost all major older CAS companies have either already declared a Smart cardless solution or are about to do so. They are under a dilemma because their cardless solution cannibalizes their very profitable card based solution so many of them are reluctant to openly recommend cardless solutions. Most new CAS companies are cardless anyways.

CQ: Do we have scalable CAS in terms of number of subscribers as well as technology?
Vineet Wadhwa: In our case we have a running demo where we make 1M subscribers in our CAS system every day and allocate 500 bouquet to them. Then we send them messages like Finger printing and Forced Messages. Then later in the day we take away all the bouquet and delete the subscribers. This keeps happening 24x7 and we carefully note the memory utilization, CPU utilization and disk utilization. We are happy to share that this system has been robust during such tests for last two years.

CQ: What features can be removed to start with to keep the investments low and can they be added in future?
Vineet Wadhwa:
1.Scalability (in terms of number of subscribers)
2.Redundancy (in terms of removal of more and more points that could become a source of failure)
3.Availability (Up time)
The MSO should make sure that the CAS vendor provide solution to start with lower cost, compromising on some features that could be added later. Of course there cannot be any compromise on the basic feature set needed for robust day to day operations, broadcaster compliance etc.

CQ: What are the must see features of a reasonably good SMS & Billing systems?
Vineet Wadhwa:
1. Scalability in terms of concurrent number of LCOs accessing the SMS, Ease of making bulk changes to systems and speed with which historical reports are generated

CQ: What problems can one face after selecting an off the shelf economical SMS & Billing software.
Vineet Wadhwa: Mostly support issues. With modern software development tools, it is not too difficult to make SMS software that can get by meeting TRAI guidelines. But once the MSO is beyond the broadcaster approval stage, the SMS has to become both as a source of information to devise strategy as well as a tactical tool to manage customer support, LCO management and revenue assurance. This frequently needs a lot of support of the SMS vendor. So MSO should not take the SMS vendor on face value. The MSO must check at least two to three references from similar sized MSOs about the support willingness and worthiness of the SMS vendor.

CQ:  Essential features of an economical middleware?
Vineet Wadhwa: Middleware could mean a wide variety of features. The features could be basic (zapper type), enhanced (giving impression of interactivity but actually not having a return path) or interactive (having a return path). For example most basic STBs now offer features like advertisements, multiple mosaics, Electronic Program guide and information display etc. Enhanced applications include features like Near Video on Demand and Active TV pages etc. Interactive STBs can utilize return paths like Android applications, GPRS dongles integrated with STB hardware that provide truly interactive applications like True Video on Demand, Interactive Gaming, Messaging etc.
Implementing Middleware features take time. This is because it needs a lot of interoperability between the CAS software, SMS software and STB firmware. Each site is a completely different project and cookie cutter mindset does not work at all in such situations. It takes a lot of cooperation and support between MSO and Middleware provider to make it work.
LCOs working as a Co-Operative

CQ: Can a co-operative of cable operators  share a CAS and SMS to reduce cost and yet to comply with the regulations?
Vineet Wadhwa: Why not? As per TRAI guidelines, CAS and SMS need to be the property of the MSO. Now multiple operators can get together, get a license and can share the headend, CAS, SMS and other such expenses. They can work out between themselves the issues of how costs would be amortized between them. We have seen some very successful instances that can become a role model for such cooperative behavior. In fact, this model brings maximum revenue and satisfaction to LCOs that have always been the mainstay of Cable industry.
Source: http://cablequest.org/articles/item/6918-technology-sourcing-market-reach-is-a-bottleneck.html

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